China contract boot camp: How foreign businesses can avoid entering into contracts involving "fake content with a genuine chop"

Most foreign-invested enterprises (FIE) rely on local teams to manage their business in China. However, sometimes things do go wrong, where senior management of the foreign investor has no knowledge of contracts which bear the official company chop, but the content is highly prejudicial to the FIE. Often it takes a court summons to bring the issue to light.

These situations, while rare, have the potential to cause serious damage to the FIE's business. In this note, we will share our practical experience in handling such cases as well as how they are viewed by the courts in China. We will also make recommendations on how to avoid getting into this type of difficult situation in the first place.

You can read the full alert here.

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